Power bill increases on the way following ESC decision

According to the Essential Services Commission, the approved increase will mean typical bills for residential customers will rise from $1403 to $1755 next financial year, and for small business customers this means an increase from $3039 to $3791.

The new prices, which are in line with other default market offers announced around the country today, will apply to all Victorian Default Offer customers from 1 July 2023 to 30 June 2024.

Around 15 per cent of households are currently on the Victorian Default Offer.

This increased the prices energy retailers paid in their futures contracts to buy electricity from the wholesale market to supply consumers.

The final offer is $74 lower for residential customers and $126 lower for small business customers than prices proposed in the draft decision released in March.

ESC Commissioner and chairperson Kate Symons said said in a statement the change to the default offer price is primarily the result of high wholesale energy market prices, driven by energy market volatility in 2022.

"The Victorian Default Offer was created to support consumers who don't want to or are unable to engage in the market to find a competitive market offer. It is a simple and transparent standing offer based on the commission's independent assessment of the efficient costs to supply electricity to consumers," Commissioner Symons said.

"We heard from stakeholders that cost-of-living pressures are making it challenging for many in our community.

"We want to make sure Victorians are aware of their energy consumer rights and protections, and state and federal government energy bill relief packages, as higher wholesale energy prices start to flow through to retail markets and consumer bills."

Eligible residential customers can also access up to $500 in state and federal government electricity bill relief to offset electricity prices.

Energy Minister Chris Bowen said customers were facing price rises of between 40 and 50 per cent before the government took action.

"These are big increases, but as the regulator made clear, without the intervention of the Albanese government they would have been much bigger," he said.

The head of the energy regulator also confirmed the price caps had kept prices under control.

However, opposition energy spokesman Ted O'Brian said Labor failed to bring more supply into the system and targeted the budget for leaving middle Australia behind.

He said the government couldn't claim the lower-than-forecast increase as a win after Labor came to power promising cheaper electricity bills.

"When the government says it could have been worse, it's the government comparing its set of dumb policies now to its really dumb policies only a few months ago," Mr O'Brian said.